The Matt Fisher Case Explained: Be Mad At Maryland, Not Progressive (Although Progressive Is Being Pretty Gross, Too)
Part I: Progressive Is Gross
New York comedian Matt Fisher recently created a viral outrage against Progressive Insurance Company with his blog post, “My Sister Paid Progressive Insurance to Defend Her Killer In Court.” In it, Fisher describes how his late sister’s insurance company, Progressive, defended at trial the driver that was allegedly responsible for his sister’s death in order to avoid paying the full amount of her policy. The story went viral, and “Progressive IDGAF” even got its own meme (pretty funny, actually — check it out).
Everybody at Progressive then proceeded to panic and made as many terrible PR decisions as possible.
First, a bunch of people started tweeting their outrage at the incident to Progressive’s Twitter account, and Progressive decided to provide the exact same reply to all 7 gazillion tweets (next to Flo’s smiling face, of course): “This is a tragic case, and our sympathies go out to Mr. Fisher and his family for the pain…” — over and over and over.
Then, in response to Fisher’s Tumblr post, Progressive flat-out denied that it had ever defended the driver: “To be very clear, Progressive did not serve as the attorney for the defendant in this case. He was defended by his insurance company, Nationwide.” Which is true, in the same sense that it is true that Bill Clinton did not have “sexual relations” with that woman. In court documents, Nationwide is technically listed as the driver’s attorney; however, according to Fisher, Nationwide had already settled to the full extent of its policy by the time the case went to trial. Therefore, since Progressive was the one potentially responsible for the remaining amount (the jury ultimately awarded $760,000), it was Progressive’s attorney who, as Fisher describes, basically ran the show at trial. Progressive was indeed responsible for defending the driver who allegedly killed his sister.
Part II: But Insurance Companies Actually Do Need to Defend the Other Driver
So this is just straight-up awful. A woman pays Progressive each month for insurance, and the result is that they wind up defending the man allegedly responsible for her death. But, actually, this is kind of the way it needs to be. Bear with us here. (And by the way, Progressive, no one is letting you off the hook for your horrendously insensitive PR crap. We’re just talking about your defense of the driver in court.)
The first thing to remember is that the type of insurance that Fisher’s sister apparently had with Progressive was not a no-fault, automatic-payout type of policy. From Fisher’s post, it seems that the other driver carried a very minimal Nationwide policy, but since the Fisher family was entitled to much more in damages than that, the Progressive policy kicked in to cover the difference:
Now, because the other driver was underinsured, that payment didn’t amount to much, but my sister carried a policy with Progressive against the possibility of an accident with an underinsured driver.
So, in a sense, Fisher’s sister really was paying Progressive to defend and pay the amounts owed by anyone who might hurt (or kill) her in an accident. It sounds crazy, right? But think about it this way:
We don’t know all of the evidence that was presented in Fisher’s case, so we don’t know exactly how close of a question the issue of fault was. But let’s say you and I get in an accident. You’re severely injured and you believe it was my fault. Being the cheap bastard that I am, I only have a $15,000 policy. Plus, I’m a blogger/government employee and I have no money, so you’re not getting anything from my pockets directly. But, since you were smart, and you bought insurance from Progressive to protect against exactly this kind of situation, Progressive will now step into my shoes and carry on my defense and then pay you if I lose in court. Because otherwise, who else will defend me? If Progressive is going to pay out hundreds of thousands of dollars based on the accident being my fault, then there really needs to be someone there to represent my side of the story in court. I can’t hire an attorney personally because I’m broke. Nationwide is technically obligated to defend me, but since their policy was only worth $15,000 anyway, they already paid it out in full, and so now they really don’t care who wins or loses — so they don’t exactly make the best representative. That leaves Progressive, the party that is actually required to pay you if I am found at fault.
In other words, this is exactly what every insurance company will do under the same circumstances. Having a different insurance company probably would not have changed the way this litigation ensued for Fisher’s family, as painful as it must have been to sit through a trial.
Part III: But You Should Really Be Pissed At Maryland For This
But there is one thing that might have changed Progressive’s hesitance to settle — in Fisher’s case, anyway. In most states, if you get in an accident and sue the offending party, the jury looks at how much of the accident was your fault (let’s say it was 2% your fault in this example) and how much was the defendant’s fault (98%). If the jury decides your damages are $100,000, then you receive $98,000. It’s called “comparative fault.” Makes a lot of sense, no?
In Maryland, though, where the accident took place, they use a pure contributory negligence scheme, which means that if the plaintiff bears any of the fault whatsoever, they get absolutely nothing. In the example above, you’re 2% negligent? No damages for you!!!
So, this is why Progressive was being so aggressive. Although Fisher describes it as an “open-and-shut” case, he conceded that the “totality of the evidence left some room for argument.” And where there’s room for argument, there’s certainly room to see how a jury could have found his sister at least a teensy bit negligent — and then let Progressive off the hook entirely. That’s why Progressive fought it. It happens every day, and it’s not even remotely unusual for an insurance company to do this sort of thing.
Insurance companies are never going to stop defending their financial stake in litigation, and, in some sense, it’s really not fair for us to expect them to. But what we can ask is for Maryland to enact a less Draconian tort system. They’ve considered it before but never done it (ahem, lobbyists? We’re just speculating here). So instead of getting mad at Progressive, which was acting like any other insurance company would, let’s get mad at Maryland instead, and demand that they act like pretty much every other state in the nation by enacting a fairer litigation scheme.
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Appellate attorney, admirer of funny people, Dolt.
Latest posts by Linda (The Daily Dolt) (see all)
Blue
August 15, 2012 at 7:00 am
The problem with this analysis is that it doesn't take into account that Maryland's laws just happen to encourage this travesty–those laws are preserved by the lobbying power of the insurance industry.
In addition, you have a really questionable logical jump–that because the defendent cannot afford a lawyer, Progressive must defend him. Really? Defendants in many other civil cases are in exactly the same situation.
Linda the Dolt
August 15, 2012 at 7:12 am
I think you might have missed the last part of the article, entitled “But You Should Really Be Pissed At Maryland For This”:
“But what we can ask is for Maryland to enact a less Draconian tort system. They’ve considered it before but never done it (ahem, lobbyists? We’re just speculating here).”
For your second point, it’s not questionable to assume that Progressive (or any other insurance company) would defend the other driver. They are responsible for hundreds of thousands of dollars if he is found liable, and there is no one else who has a financial interest in defending him. In reality, plaintiffs are not going to reach into the defendant’s personal pocket (most people don’t have the money), so the driver is not going to provide his own defense. Nationwide doesn’t care because they’ve already paid out. That leaves Progressive as the only party who cares. They’re on the line for hundreds of thousands of dollars; therefore, they defend him.
The way this insurance is designed is that the insurance company is supposed to stand in the shoes of the defendant.
george
August 17, 2012 at 1:49 pm
This article ignores the real issue. My question to Progressive would be: Is this what I should expect as a customer of yours?
Linda the Dolt
August 17, 2012 at 2:08 pm
It's not something a customer might expect but it is commonplace. Your auto insurer represents you AS A DEFENDANT, not necessarily as a plaintiff.
Hugh
August 17, 2012 at 7:09 pm
Dear Linda,
Thanks for providing some helpful legal insight. Hopefully this incident can be an impetus for Maryland to enact tort reform.
However, I believe you are mistaken on a couple of points:
1. "If Progressive is going to pay out hundreds of thousands of dollars based on the accident…"
The family was only seeking their $75K claim balance (the difference between their policy and what Nationwide paid).
2. "…this is exactly what every insurance company will do under the same circumstances."
Putting human compassion aside, I'm guessing that allowing this dispute to go to trial cost much more than $75K in legal costs alone. Corporations will often settle matters like these (even for much more winnable cases) for this very reason.
It does seem Progressive was stunningly pig-headed in not settling this case quickly and quietly. They are getting their just desserts.
Linda the Dolt
August 18, 2012 at 3:38 am
Hugh,
You're absolutely right. I had read that the policy was for $100,000 so that's where I got that figure but with the Nationwide policy they only paid out $75,000. I corrected the misstatement above.
As for your second point, I really just meant that any other insurance company would defend the other driver if they felt it was in their financial interest to do so. In retrospect it definitely was not in Progressive's interest to go to trial, but that was just a miscalculation on their part. Another insurance company may have had more foresight and simply settled, but any insurer that thought it would be worth it to go to trial would have done the same.
Thanks for your comments. And yes, Progressive is getting their just desserts. I'm not shedding any tears for them.
perfectlyGoodInk
August 18, 2012 at 5:40 am
"In other words, this is exactly what every insurance company will do under the same circumstances."
Society's reaction to this is highlighting that there is a tremendous conflict of interest here. When you purchase a service from somebody, when you are their customer, they are supposed to serve you. This case vividly and starkly illustrates they are only pretending to serve you but actually serving shareholders, and so societal outrage is understandable.
But I don't agree that *every* insurance company would behave this way. This conflict of interest between shareholder and policyholder only exists for shareholder-owned insurance companies. There are mutual insurance companies that are owned by the policyholders. The goal is then shifted from paying as few claims as possible to making sure premiums are charged and claims are paid at an actuarially fair rate for everybody. Such a company probably would have actually examined the merits of the claim rather than just automatically fighting it.
Furthermore, many insurance companies gain business by heavily advertising that when something bad happens to you, you want somebody with deep pockets on your side to take care of you. Progressive is no different, putting a very quirky and very human persona out there in Flo. For a person to behave in the way that Progressive acted would have resulted in them being publicly shunned by everybody for acting so inhumanely.
This is evidence that Citizen's United v. FEC was decided wrongly. Firms maximize profits. No moral person acts like this; a sense of right and wrong constrains how far somebody will go to make a buck. Only a child who hasn't learned better would continue to lie when caught with their hand in the cookie jar. Furthermore, when a person dies, it is a tragic affair. When a corporation "dies," it is merely creative destruction ala Schumpeter, and it is a necessary and beneficial removal of inefficiency from the system.
If a firm thus does not have the natural right to life, they have no other natural rights. The only rights that should be conferred to them are ones which benefit the economy — the right to private property, and the right to contract. The right to vote or to influence the political process just results in rent-seeking, or lobbying for laws designed to make them more money — like Maryland's contributory negligence.
Yes, I'm sure this happens all the time. When you see one cockroach, this probably means there are hundreds of other ones that are hidden, cases where the person wronged was not as eloquent as Matt Fisher. This is part of why there is so much outrage, that we are disgusted that this kind of thing happens all the time. It should not be so.
Linda the Dolt
August 20, 2012 at 5:38 am
"When you purchase a service from somebody, when you are their customer, they are supposed to serve you."
The thing is, your automobile insurer represents you as a defendant, not as a plaintiff. They will certainly defend you if you are sued, as they are obligated to do, but they don't have any obligation to help you with your plaintiff's suit.
I agree with a lot of what you have to say, but I don't believe this is a conflict of interest. Insurance companies take an adverse position to their customers all the time, and this is just one example.
There is no way that insurance companies will simply allow customers to take whatever customers believe they are owed under their underinsured motorist policies, so I do not feel that this case will lead to insurance companies staying out of the litigation of these cases. However, I do feel that they might be more clear upfront in issuing policies that this might lead to the insurance company defending another driver in court. I'm sure they will find some PR-friendly way of saying this.
Seth
September 18, 2012 at 3:09 pm
Actually, no, it's still Progressive's fault. The other guys insurance had already accepted liability, and from the facts in the case that makes sense. Also, Progressive was under no obligation to defend the guy–after all, they made multiple offers to settle out of court (but for way less than they were on the hook for), and that would have been impossible if they had a legal obligation to defend the guy. Nope, Progressive did this because they figured the grieving family would not want a court fight and would accept the lower amount. And in any case, any amount that Progressive pays out can be subrogated against the at-fault party. The correct sequence of events should have been:
1. Guy's insurance pays out
2. Progressive pays the underinsured motorist amount
3. Progressive sues the guy to recover the amount
For the record, I've worked for a major insurer for the last 16 years—I've seen shit like this from other carriers before. I've never seen my own company pull something as stupid as this; I truly hope I never do.